Discussing the federal budget and impact on Canberra - ABC 666

Posted by Andrew Leigh Mp48sc on May 14, 2014

RADIO INTERVIEW TRANSCRIPT

ABC 666 CANBERRA - MORNINGS WEDNESDAY, 15 MAY 2014

SUBJECT/S: Budget: Australian Public Service cuts bigger than promised and impact on ACT; Zed Seselja; Infrastructure spending ignores public transport; State schools and hospitals budgets slashed and prospect of a rise in the GST

HOST GENEVIEVE JACOBS: Let’s do some excavation on what the budget means for the Territory’s economy. The Member for Fraser, Andrew Leigh, is on the line. Andrew Leigh, good morning to you.

JACOBS: I'm well. Now there's a lot of heavy lifting here according to the Treasurer. Does Canberra end up with the hernia?

LEIGH: I think we do Genevieve. I mean we were the place that was targeted the most by the Coalition's pre-election promises and I think the place that was most entitled to think that was as bad as it was going to get, that when Zed Seselja said there would be 12,000 public service job cuts that there actually would be 12,000 job cuts, not 16,500.

JACOBS: Well 16,500 won’t be entirely here in the ACT though. We should be quite clear about that shouldn't we?

LEIGH: The 12,000 pledge was there would be 12,000 public service job cuts and that would be the worst of it. Now we find that as Labor said repeatedly before the election, and were attacked by the Coalition for saying, that was just the beginning. And for a 'no surprises, no excuses, adults in charge' government it's pretty extraordinary this morning that we're playing 'pick the kept promise' rather than 'pick the broken promise'. Whether it was ABC and SBS, or no new taxes, or no cuts to health or education, you've got promises being smashed faster than a bull in a china shop.

JACOBS: Andrew Leigh, though, let's acknowledge that it was a sober budget. Business says it’s not overblown with revenue assumptions. Was it inevitable for whoever was in the house this term to have some kind of budget that addressed the end of the resources boom in a fashion similar to this?

LEIGH: It's a good question Genevieve. But I don't think it was inevitable and the reason I don't is that if you compare the pre-election economic and fiscal outlook, put together by the secretaries of Treasury and Finance with Joe Hockey's first budget update, he managed to double the deficit in his first couple of months in office. And there are a range of decisions he made to double the deficit: getting rid of the carbon price and the mining tax are among them, but also going soft on multinationals. And now he's failed to halve the deficit. He's taken the axe to pensioner assistance, to family assistance, his broken promises on taxes, on fuel excise, and GP payments, but he still hasn't managed to get the public finances back to where they were when Labor left office.

JACOBS: Well there's certainly a lot of reliance on infrastructure proposals to provide the necessary stimulus to the budget post-resources boom. Will the roads, the ports, the airports guarantee us, as the Treasurer suggested, a permanent correction to the end of the mining rivers of gold?

LEIGH: I think infrastructure is a good thing. Certainly when we came to office in 2007 we took Australia from 20th in the developed world for infrastructure investment to be first in the developed world for infrastructure investment in 2012 and 2013. And if this government continues that legacy that'll be terrific. But I do see a risk that they are returning to the old pork-barrelling model in which you don't do proper cost-benefit analyses. So they're ruling out, not because of economics but because of ideology, urban rail projects. For this government infrastructure is roads and roads only and that means you don't build fibre to the home NBN - you stop it at the cabinet down the street. And it means you don't put in place the public transport infrastructure that's really vital for cities, not just Canberra, but the bigger cities as well.

JACOBS: Well let's look in more detail at the ACT's economy. The budget speech last night was fairly strong on rhetoric, not so much detail. As a number of commentators have identified, quite a few of the government's savings have been achieved by pushing those savings on to the states. Now it's particularly with regard to education and health funding. How will that affect the ACT with its perennially low income base for the state government?

LEIGH: I think it'll be a huge challenge for the ACT and when Tony Abbott said you can vote Labor or Liberal and you'll get the same education package, he was clearly telling porkies. He gets an 'F' for honesty on that one. Canberra's kids will be affected by worse education spending under this government. And again, why is the Government doing it? Well it's doing that to make room for a tax cut for mining billionaires, and for $50,000 for the most affluent families when they have a child. It's the wrong set of priorities I think.

JACOBS: Let me go to a couple of different texts, I've got a number of suggestions for the three word budget. “Religion over science,” JP says. Fran reckons 'better than predicted'. Jenny says, “User pays ideology”, while Hillary reckons ”North Shore budget”. But Andrew has texted me saying, “Less than 40% of the APS work in the ACT. Expenditure has to be reined in. Federal Labor has committed this nation to a sea of red in to the foreseeable future.” Now let's acknowledge that 14,500 jobs were going to be cut under the former government Andrew Leigh, so, it's not necessarily....

LEIGH: No.

JACOBS: No?

LEIGH: No. Absolutely not. Don't believe every press release you get from Zed Seselja. Look at the facts. Public service numbers grew modestly year-on-year, every year in Labor's term in office, except for our final year when they fell by around 900. If it were true that the former government was going to have made cuts of the order that Mr Seselja claims, then of course Mr Hockey couldn't be banking any significant saving as a result of what he is doing to the federal budget. So they can't have it both ways. They can't say we're making huge cuts to the public service when they're standing in Brisbane, and then stand in Canberra and say actually what we're doing is what the former government would have done.

JACOBS: Now, we will face a reduced GST income here in the ACT, down from $1.16 billion to $1.13 billion. The GST of course was originally designed to assist the states but that money has often grown state public services as well. Do you think this budget also means that state level public service cuts will be likely as well in order to pay for those higher health and education costs?

LEIGH: I certainly think it will have flow-on effects, to even what a lean and efficient government like the Gallagher Government, is able to do. And again, this is ideology rather than good science driving the decisions. The number of public servants per Australian was the same in 2013 as it was in 2007, and sits at about the developed country average. So it's not as though we have an excess of public servants and when the cuts come they're going to come, from some extent, from Centrelink and Medicare offices, but they'll come disproportionately from those central agencies which is why Canberra is going to be so hard hit by public service cuts. I had a 48 year old woman write to me yesterday who is unemployed after she lost her public service job a couple of years ago. She's terrified that after mooted cuts to her husband's agency he might lose his job too. And with two girls in Catholic schools she's just not sure how she's going to make ends meet on the three bedroom house in a modest suburb on the north side.

JACOBS: Would you imagine though the states would be begging for more GST, what we've been discussing?

LEIGH: I think there will be a campaign for more GST and that would take you to the one pledge that Mr Abbott hasn't yet broken. I think that one could be on the chopping block as well.

JACOBS: But Andrew Leigh, a $300 billion debt reduction in the next decade, $16 billion interest bill reduction, $36 billion worth of savings. Those on the face are worthwhile and respectable aims aren't they?

LEIGH: But reduction in respect to what Genevieve? It's a reduction in respect to Mr Hockey's first budget update. So once you realise he's doubled the deficit - and don't take my word for that, ABC Fact Check has given that one a big tick - then the fact that he hasn't managed to halve the deficit ought to be a real worry. He's blown out deficits through a series of bad economic decisions, but even these savage cuts don't make up for loss of mining tax and carbon price revenue, to say nothing for the lost revenue in multinational profit-shifting and the other 50 odd tax measures that the government abandoned.

JACOBS: Now what will happen on the floor up on the hill? You won’t want to block supply I presume, but what are the legislative instruments you will be looking at?

LEIGH: That's right, we won’t be doing a 1975. But we will certainly be voting against the GP tax, given that as almost every medical expert has around the country, that it's not appropriate to be asking people with chronic disease to pay to go to a doctor. And we won’t be supporting the change in fuel excise that's been firmly announced by the Shadow Treasurer.

JACOBS: Well look on the bright side Andrew Leigh, with the new medical research endowment funding there could be a Nobel prize for hernia cures.

LEIGH: [Laughs] You're always one to look on the bright side Genevieve and I think it is an important thing to do on a day like this.

JACOBS: Well, you know, research is our strength, and certainly here in Canberra, all that heavy lifting causes a hernia, we'll get something out of it. Andrew Leigh, many thanks indeed for your time.